Uber now charging drivers $520 per year to lease company iPhone

It looks like UberX drivers won’t be making quite as much money anymore.

The Uber Seattle team sent out email notices today to UberX drivers notifying them that as of this Monday, they will have to pay $10 per week for a “device subscription fee.”

Uber said that the new fee is being enforced due to “the steep cost of continuous GPS data on the Uber phone,” which is given to every driver to use to coordinate pick-ups.

“Uber Seattle has previously waived the device subscription fee for uberX partners, but as we continue to grow rapidly, this cost is no longer realistic for us to cover on a weekly basis,” the letter reads.

Uber Seattle General Manager Brooke Steger confirmed the change with GeekWire this afternoon.

One UberX driver in Seattle tells us that he will quit Uber and move to Lyft because of the new charges.

“Instead of forcing us to pay for their data on the locked down iPhone they have us use, why not allow us to use our own phones?,” the driver noted. “I have plenty of data on my phone and it is a lot faster than their slow Verizon 3G data plan they have for the iPhone 4S they loan us.”

Another driver in Chicago voiced his frustration with the new fee on Reddit, noting that the iPhone from Uber does not include text, voice, or data plans.

“Most people who drive Uberx in large markets started out as people trying it out in their spare time, as supplemental income,” Reddit user financingisfree wrote. “They may not drive every day, let alone every WEEK. If you take a week off to go on vacation (or god forbid just don’t drive every single day), you are now losing money, rather than making extra money.”

UberX drivers in Seattle already give 20 percent of each ride to Uber, and this new fee will force them to spend another $520 per year.

“While we recognize this new cost is not insignificant, we want to remind you that this is less than the average fare of one trip in the city,” Uber wrote in the letter.

It’s unclear if a driver will still have to pay the new fee even if he or she does not work for an entire week. We’ve followed up with Uber for more details and will update this post when we hear back.

Taylor Soper is a GeekWire staff reporter who covers a wide variety of tech assignments, including emerging startups in Seattle and Portland, the sharing economy and the intersection of technology and sports. Follow him @taylor_soper and email taylor@geekwire.com.

Comments

Guest

More evidence that there isn’t nearly as much money in cab companies as the VCs in Silicon Valley would like to think — they have been sold a bill of goods. Start paying for real costs like regulatory fees, insurance, car repairs, and even data plans, and there’s not that much money in it. Even billionaire Hiroshi Yamauchi of Nintendo fame couldn’t make a lot of money on cabs.

And a question for the readers … how long until a spammer shows up telling us how great Uber and Lyft are and offering a $20 coupon?

Guest

Yawn. Ten bucks a week is peanuts — most drivers make that much $ in 30 minutes!

We are unconcerned. If Uber were bad, people would quit. Uber is good. People choose to work there.

balls187

Logic fail.

Guest

That not sentence. Talk more.

Slaggggg

YOU’RE not a sentence!!

Guest

I am not a sentence! I am a free man!

YNWA

He is correct because your logic is a failure. So if you make $5000 driving in a year getting 10% flushed down the toilet is peanuts?

In addition to the 20% they already take of course. So for many drivers the fees are now 30% or more. Slick one Uber. Almost got it past us there.

Guest

$5000 a year is ridiculous — you should expect to make $20-40 an hour while you’re working, so we expect that you should be making $54,000 per year. (Source: http://www.geekwire.com/2014/uber-drivers-make-70k-per-year/ ) Either way, all the expenses that you pay as an Uber driver are tax-deductible.

If you’re only willing to work for about 5 hours a week, Uber isn’t for you. This $10 rental fee is an excellent way to separate the real committed Uberites from the dabblers and dilettantes.

YNWA

“This $10 rental fee is an excellent way to separate the real committed Uberites from the dabblers and dilettantes.”

Hahaha you just made my day. Uber is exactly for these types of people. That is how they sell it. The majority of people do this on the side.

And the average driver makes about $20/hr after the 20% and gas expenses. Not including car maintenance and depreciation. Both these come from my experience and talking to plenty of other drivers at meetups.

But what would I know. You are the real expert here it sounds like Mr. Guest. Screw em’ till they quit is your motto apparently. LOL

Albee Doh

What do you think “tax deductible” means in this business?

The pay is terrible. In fact, relative to costs, this is one of the worst paying jobs in the US.

So you’re saying that Uber drivers make $20 / hour? That’s not much more than the minimum wage Sawant is pushing for.

Guest

The $15/hour minimum wage takes effect in 2018 for most businesses. By then, drivers will be making at least $40/hour and it will cost only $12/week to rent an iPhone 7f. (I know, they’ll be wishing they had iPhone 7a, but we all know that AutoGlo coating melts faster than Justin Bieber’s wife on payday!)

Albee Doh

Before costs.

Costs are a factor with regard to pay. The ROI in this industry is terrible. It’s one of the lowest paying jobs in the nation.

Fuck you

Hoe said you that you stupid idiot

Neal Blaise Salogar

I’m quitting. I just went to uber for the first time in months, unaware of this fee. They charged me $40 in back fees, meaning I drove for 4 hours for $15. Asshats.

Albee Doh

People are quitting. The turnover rate is between 50-65% within 6 mos. I tried Uber and quit after two months.

Don’t believe me? Try it for more than a month for 30 or more hours a week.

Kary

Somewhat shocking that this supposedly valuable tech company is so backwards when it comes to technology. You have to use their phone?

YNWA

Yep. It runs the Uber Driver app and Apple Maps. So it isn’t even good at doing GPS or finding things. You have to use your own phone with Google Maps or Waze so you can actually get around the city!

Kary

Even worse, but what I was thinking is that it’s odd they can’t lock down a mobile app to run on someone’s phone, that they feel they need to control the entire phone. It would be like if to use the Starbucks’ app on your phone you had to use a phone from Starbucks. Or in the case of real estate agents, to operate a lockbox you had to have a phone from GE.

I guess it will be a long time before they have an Android app! ;-)

Jeff

I won’t be driving, I like how they wait until you have have given them all your info, and then tell you about their service animal regulations. I just bought a new car and fanned if I’m going to let a Danny dog tear up my back seat, blind person or not. They get 20%, $10 per week rent on their phone. But we pay our gas, insurance, maintenance, wow, ‘re-thinking this shit!!

Blues Daddy

What’s the Service Animal regulations, since I have a member with one. this is a big one as a deciding vote.

As the whole Uber/Lyft/Sidecar saga unfolds we’ll get more and more news about how these crooks failed to tell their friends in the media and their investors about their true costs of doing business. And, how their business model does little to nothing for those who work for them.

In a city that espouses the greatness of a $15/hour minimum wage, it’s hard to comprehend how there seem to be so many supporting ‘TNC’ companies that have built their businesses on the backs of low income drivers, and on lies to government entities, while their multi-millionaire owners take the money and run.

Albee Doh

BINGO.

http://barryhurd.com/ barryhurd

I can’t believe they force the use of a 4S. So many drivers have gps enabled phones, tablets and cars….

It seems Uber has disclosed another ‘traditional’ cost it can’t cover. If too many of these show up it’ll be the good start of a billion dollar bubble burst.

Timothy Gregg

As an Uber Driver I feel I can answer the question listed in the article.

“It’s unclear if a driver will still have to pay the new fee even if he or she does not work for an entire week.”

Yes, we are responsible for this fee until we return the iphone no matter how much or how little we work. The money is not withdrawn from our bank accounts however. The money is just taken right from our direct deposits.

disqus_xrRiYCdmft

Yes because that phone actually uses 40$ a month of data for that simple app. Uber would never skim off the top from their drivers.. never. Oh and they don’t ever screw drivers out of canceled fares. Never.

balls187

This is a crummy deal for the drivers.

They’re using the phone for company business. Really uber, you brag about how much drivers can make, and then you going to nickle and dime them?

As a driver, I am furious about this. First, Uber gave very little notice. The fee starts immediately. Second, no consideration has been made for very part time drivers, or drivers who are on vacation. And third, Uber drivers are forced to use an iPhone dedicated to the Uber driver application. We are unable to run that app on our own phone where we would have combined the data use with our existing data plan, saving money. Lyft, Sidecar, and other transportation apps have no such problem. Furthermore, most Uber drivers had to pay a $300 deposit on the Uber phone early in their work for Uber. I see many drivers at least considering switching over Uber’s competitors. When combined with the $1 Safety fee on every ride which goes 100% to Uber, it feels like Uber is expanding a “nickel and dime you to death” approach towards its drivers.

ColdHardReality

Don’t like it – quit – crying about it will not change it – Most people sign up for a few services to take advantage of too many of one at locations – too many uber drivers? switch over to lyft/sidecar etc…you have the power to drive for whoever you want whenever you want – if you choose not to take advantage of that opportunity because of the whopping $40 monthly cost – stick to the app based companies — everyone knows Uber is larger and thus has more potential fares for you — is $10 a week THAT much to pay to tap into a huge supply of people waiting for rides? If it is – turn in the phone. You are not a slave. Chances are if you signed up to drive for Uber you are in it to make more than $10 a week with them.Many drivers make several hundred a weekend – if your not serious about driving turn your phone in and do everyone else a favor.

Bongo Luongo

Spoken like a true a***ole

Albee Doh

Cold, hard stupidity.

You fail to recognize that this is a growing trend in the market.

Employers, especially millionaire and billionaire ones, are colluding and depressing wages in virtually all sectors.

The “scorched Earth” strategies are leaving workers with increasingly few options that pay reasonable wages.

You don’t know much about history. You certainly don’t know much about economics.

In a market economy the less people are paid the fewer goods and services are consumed in such an economic system. People like Henry Ford understood this and that is why he paid his low-totem employees a much higher wage, enough that they could afford to buy the cars they built for the company.

Higher wages are what helped to build the middle class. Such economic policies made the US more prosperous than it had ever been before or since.

Your cold, hard ignorance is what’s sinking the US economy.

That’s.

You clearly don’t love America. Perhaps you should leave it.

An American

you are a real slave and pimp.

Kary

One other thing that makes this surprising. Having these smart phones in every state should make Uber clearly subject to state taxation. Not smart.

Slaggggg

“I’m not a lawyer, but I play one while driving my taxi”

Kary

Most ignorant comment on the Internet. That’s hard to do. Congratulations!

Bongo Luongo

Actually I thought it was pretty funny. Have a sense of humor. And yes, you are correct. I assume this is a charge that is coming to every driver.

Albee Doh

Are YOU a lawyer, Slaggggg? Or do you just play one when trolling the internet?

If you’re in a legal profession than you must be aware of these facts, eh?:

You’re a little late to the thread, chief. The reference you cited is from the IRS, which is federal, but the comment I replied to had to do woth state taxes. The IRS has nothing to do with state taxes.

Albee Doh

There are two other links.

I usually do this funny little thing called “cross referencing.”

Legal professionals who are worth anything are pretty hep to the practice.

And while the thread is a bit dated the topic is as relevant as ever, Pocahontas.

beach

The even bigger issue is the 20% less that uber drivers will be making after Aug 1st. I believe this has already been implemented in some cities. It’s getting closer to minimum wage after gas, tax and expenses. Really sucks.. uber has almost zero regard for their drivers. G R E E D

Kary

I think the first Guest comment at the bottom probably has it right–there just isn’t as much money in this industry as the VC were lead to believe (or that they are trying to get other people to believe). In the past has there ever been something you would call a “major taxi-cab chain?”

Albee Doh

Major taxi-cab chain?

You mean like Yellow Cab?

Seriously, dude?

It’s not that a cab service can’t be profitable for both driver and entrepreneur (as well as affordable for riders), it’s just that people at the top want to horde the profits at unreasonable levels and riders think a $4 fare is a reasonable price.

Consumers need to stop being so willfully ignorant.

Kary

I was trying to compare taxi companies to say companies on the S&P 500. The valuation of Uber is absurd–that was my point. Not that their might not be a taxi company that is relatively large relative to other taxi companies.

Bongo Luongo

Actually it just hit Boston. I can’t do it any more. Can’t make any money.

I drive for Lyft and Uber. Lyft is more fun (the passengers are usually not “stuffy”, and the staff responds to emails or questions with a real response- like a personal email more than a straight-forward business approach). Lyft is more “community” feeling. It’s more social. Their Driver App is far superior, faster, and doesn’t crash. Speaking of crashing, if the Uber App crashes while you’re in the middle of a ride, you only get paid to the point when it lost GPS (the crash), no matter how far you continue to drive- or if you catch it and restart the phone/app. You get screwed for the rest of the ride. Also, when Uber is running one of their $35/hour incentives days or weekends, somehow even when you accept the required minimum of 90% of all rides, Uber mysteriously says that you’ve only excepted less than 90% and you don’t get your incentive. I’m not the only driver in Los Angeles that this has happened to. And when you email them to let them know that that is incorrect they will email you back ONCE telling you it is indeed correct- it’s what their system says and that’s that. I’ve emailed back four times telling them that this needs to be reconsidered and I would like upper management to look at this, and they don’t respond anymore. They literally do not respond to my emails any longer. Uber is definitely getting their phone back I will be driving full-time for Lyft.
P.S. Ever try going to one of Uber’s “gatherings”? Yeah… You can only sit down and have lunch IF you bring a Lyft driver that signs up to drive for Uber. Otherwise, there’s no room at the table for you, lol. Also (at least here in LA), the meetings are at places where parking is not free. “Parking will NOT be validated. You must bring a Lyft Driver…”
Even to bring the phone to one of these meetings just to turn it in will cost me $10 to park, lol.
Fist-Bumps!

Seb

So do you make more money as a Lyft driver? I feel as though they aren’t as “popular” as Uber which would mean less riders. Was thinking about becoming a driver for Uber but now not sure if I should do Lyft instead…

ColdHardReality

Do all of them – having options is a good thing

Albee Doh

I dropped Uber. I only do Lyft now but likely won’t be for much longer. I will be trying Sidecar as well.

Uber is a horrible company run by horrible people. Don’t bother.

I make about the same with Lyft. Sometimes a little more with tips being an option on their app.

Zico

I worked as an UberX driver for over 2 months and logged over 600 rides. I quit once Uber slashed the rates early in Feb. According to Uber’s weekly statistics, I was consistently better than their “top” performers. Even when the rate was at $2.55/mile, I actually made very little even though I “earned” over $1,000/week. Once they slashed that to $1.36/mile, it was foolish to continue. Most of the drivers drink the Kool-Aid and drive for Uber because they think it is cool and fun. Economically, it is a disaster for the driver, though it can be hard to see why. The problem lies with the increased wear and tear on the vehicle and the fact that you really have to drive 2 miles for every mile you are actually paid. To get rides, you have to go to where people are looking for a ride, and then back again.If you don’t go back, you don’t get fares. I kept track of my mileage for at least 30 days to come to the 2 miles for every 1 paid conclusion. Gas, depreciation, and maintenance are at least $0.50/mile. That’s $1/paid mile since it is 2 for 1. That leaves you with $0.36/paid mile divided by 2, or $0.18/mile driven. Uber then takes its 5% and you are left with about $0.15 for each mile driven. This calculation does not even take into consideration your increased personal risk of injury or the very likely scenario where your insurance company will not pay your claim for damage or injury since you were using the vehicle for commercial purposes. If you don’t tell your insurance co that you were driving commercially, it is likely fraud. I enjoyed driving for Uber and was disappointed to have to end it, but I had to be realistic. When you take the time to analyze what is really happening, you realize Uber is just a way for you to drive other people around while sucking all of the value out of your car and paying it back to yourself. Some business model, though if there actually is a sucker born every minute, Uber will be fine. Don’t listen to the shills that constantly post comments on every article about Uber. Set down that glass of Kool-Aid and do the math yourself or talk to an accountant.

Blues Daddy

Holy Carp wow thanks for the info never mind what i asked before screw them. I got better things to do thanks for this info Zico

and here your the spam your were asking about!!!I HATE that Uber is forcing me to take and pay for their useless phone. we can’t even make calls on it. I pay a separate charges for my cell phone plan that riders call me on if they are delayed when picking them up, and it’s unlimited minutes for $360.00 a year. Isn’t there some kind of law about not giving someone a choice on what the choose to use??? BTW GET A FREE $20.00 CREDIT TOWARD A FREE RIDE. use promo code; 8RERN for signing up on your phone (hey, I have to pay for this uber’s phone somehow) Lyft ride promo $25.00 credit ED1032 same promo codes can be used by anyone for one time ride.

Marie @ RideShare Guy

I agree that why don’t they let the Uber driver use their own phones? For me, as long as they have a smartphone to use and a GPS!

Me

$40/month for an iphone that only enables you to use the Uber app.. Plus the 20% they take every week is a bit excessive …

Uber Driver from Phoenix

I am in Phoenix and I haven’t driven for the past three weeks and I owe Uber $30. At least the people is Seattle received a heads up. I do not recall receiving an email indicating about that new fee.

Narindra Persaud

UBER say they Only take 20% . That is not the truth they take more than 20%. I have work about $780 to $790 one week but received $521. It is not right that UBER lies to driver. LYFT is so much better than UBER. Since I work with both app I can really honestly Say that Lyft is much more better to work with.

Horst Schadenfreude

I’d rather dog out their phone than mine.

Terri Christian

They automatically mailed me the phone when I got hired. Now I cant figure out how to return it. In the mean time I’m getting charged. This sucks